You’ve just been offered a plum post as manager of a large division in an international corporation. Before uncorking the champagne and calling all your friends with the news, consider:
Ideally, managers of decentralized operations are expected to act like autonomous, free-ranging, market-sensitive executives—much like the classic entrepreneur. But in reality, you are often trapped in a hierarchical middle, held accountable for profit-center responsibility while, at the same time, chief executive officers and their surrogates violate your autonomy without recognizing it, sometimes even going behind your back to intervene on divisional turf.
If you are offered a division manager’s job, talk to the CEO (it will be the chief operating officer in a very large corporation) and ask, “What kinds of decisions do you see yourself getting involved in?”
How does the answer correspond with your expectations regarding autonomy? Can you live with it?
One rule of thumb regarding a reasonable, appropriate breakdown of responsibility goes like this:
Capital expenditures and capital budgets—that is, the use of investor capital—fall within corporate headquarters‘ domain. These items must be approved in light of corporate strategy. A division manager can make recommendations, but shouldn’t feel it’s his or her right to make these decisions.
Division managers should seek advice from corporate headquarters in areas of legal significance affecting the entire company.
Division managers should defer to corporate headquarters on those public relations issues affecting the image of the whole company— for example, in dealings with the news media. (Sales promotions on a particular product or service are divisional responsibilities, however.)
Division managers, for their part, should control operating expenses once the budget is approved. Pricing, manufacturing, marketing, engineering and sales should all fall within their purview, as should the development and implementation of new products once they arebudgeted.
Conflict arises most frequently when the CEO approves your budget, then wants to get involved in approving ad campaigns or price discounts related to a promotion or in deciding whether or not to hire sales staff provided for in the budget.
In bridging such difficulties, keep the following points in mind:
- An almost sacred desire to make the numbers is crucial. It’s going to really come down to a confidence factor. A CEO may back off because he doesn’t want to mess up a winning game. But if the manager isn’t making his numbers, the corporate types come out of the woodwork.
- Maintain an ongoing dialogue with headquarters. Corporate staff are often looking for the “gotchas.” If they find something, they may go to the boss and say, “This guy has a problem and you don’t know about it yet.” It takes something away from them if you say beforehand, “I have a problem and need help with it.”
- Remember that headquarters takes anything to do with the press or government very seriously—particularly in public companies. Trying to hold on to that is often fatal. Pass on anything relating to litigation of any substance, too.
- Fostering divisional identity and esprit de corps should be a major objective. One morale builder: Let your staff know that you are trying to get the best of them promoted to bigger positions in the company. This additional career ladder—nonexistent in a smaller firm—can be a powerful motivator. Once or twice a year, take the time to meet individually with your people on what the company is doing, from a total perspective, and where you see them making the biggest contribution.
- New division managers should avoid the temptation to replace staff with their own people instantly. You can often make your biggest mistakes early on, by not taking the time to see where people’s strengths are so wait three to six months before making a switch, if you can.
- Keep your own counsel. Don’t analyze the CEO’s attitudes and failings for the benefit of subordinates. Don’t weep on the CEO’s shoulder regarding the shortcomings of division executives. If the CEO insists on a policy highly unpopular in your division, make your objections privately and, if that doesn’t work, get behind it. Don’t represent it as “headquarters‘ view” but as “our view.” Public disagreement only announces to everyone that you are lacking in power to change the situation.
- Demonstrate grace under pressure. Like it or not, superiors do sometimes overrule division bosses while still holding them accountable for the division’s profits and losses. There are times when you simply have to accept corporate intervention as though it were an act of God. In a conflict situation, present your case as ably as possible and, if overruled, resubmit it. If overruled again, drop it. This is a sign of true maturity on your part.
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